Regulatory changes to payment processing
Common Monetary Area (CMA) payment processing changes set for September
Times are changing, and so is the way we bank. That’s why we’re here to help our clients make the process easier to understand and faster to get used to.
A regulatory directive was received that changes were being made for domestic payments and collections processes to Namibia, Lesotho and Eswatini (Common Monetary Area (CMA) countries). The changes aim to enhance the efficiency and security of cross-border transactions. They are also necessary to enhance compliance with international standards and recent regulatory adjustments within these CMA countries.
What is changing?
Effective from 30 September 2024, banks will no longer process electronic funds transfers (EFT) for domestic payments (The Regulatory change requires changing from processing payments and collections as domestic transactions to international transactions) or collections to CMA countries. Starting 9 September 2024, Standard Bank will be implementing changes to comply with this new directive. This means that payments to other CMA countries will be processed as cross-border transactions, whilst Standard Bank will not be able to debit account holders in other CMA countries. This includes both credit payments and debit order collections using the South African BankServ EFT system.
What does it mean?
Payments to CMA countries are now regarded as an international payment, which has stricter requirements. This means that going forward, debit order collection processing will only be supported in country. If you're a business collecting debit orders from accounts within any of the CMA countries, you'll need to initiate them from an account created in Namibia, Lesotho or Eswatini. This means you'll need access to an in-country banking service to submit debit order collections and manage receivables and billing processing accounts. It is important to note the following:
- If you are currently receiving payments from accounts in any of the CMA countries, these will be received and processed as inward telegraphic transfer payments.
- To ensure your account is set up correctly for CMA payments, we'll be removing any existing automatic payment instructions. This includes the following:
- Scheduled or standing orders
- Future-dated payments or recurring payments
- Public beneficiaries or company deposit identifiers (CDI)
- All automatic payouts to all CMA nominated accounts will be cancelled.
- Should you need to make payments to accounts in any of the CMA countries, you will need to do so using a cross-border transaction service.
Standard Bank is here for you
We are committed to providing our clients with efficient and secure international payment solutions, no matter where they are. That’s why we’ll offer the following alternative payment and collection methods to ensure our clients can continue to transact with people and businesses in the CMA countries.
Important to note:
To process payments to the CMA countries, we will require additional information to ensure that your payment complies with the regulatory requirements:
Beneficiary details
You’ll need the following information to make a payment:
- To pay a person, you need their name, surname and full physical address
- To pay a company, you need the company name and their full physical address
- Account number or international banking account number (IBAN) and a valid bank SWIFT code
- Beneficiary bank’s physical address
Reason for payment
Businesses are required to report the reason they are sending funds to a foreign party:
- This is done through balance of payment (BoP) reporting where you are required to enter or choose a BoP code which describes the reason for your payment.
- This allows us to report to the FinSurv and ensure that your transactions are compliant within South Africa’s regulations.
- For payments to the CMA countries, you are not required to provide supporting documentation.
Method of payment
You also need to decide how to send the money. However, it is important to note that international payments may take some time to process. Plan ahead and allow for this delay, especially if you have time-sensitive payments to make.
You can choose any of the methods mentioned below. Each option has its own process and fees, so choose the best fit for your needs:
| Methods | Process and fees |
|---|---|
| Business Online International Banking (BOL) | Existing BOL users can continue to process payments to CMA countries. If you have previously processed payments to CMA countries through Domestic Business Online, you can enable the International Banking module on BOL to continue processing payments to the CMA countries. Please contact your relationship manger to enable this feature. This payment system offers several benefits for businesses, including segregation of duties and individual limits within the company structure, ensuring proper financial management, and integration with mainstream accounting packages. Future-dated payments can be made as well. |
| Digital BoP form | Clients can email their payment instructions to [email protected] using a digital BoP form, available here. When you complete the BoP form, ensure you populate all the mandatory fields with accurate information. This includes details such as the recipient’s bank account information, the payment amount and any relevant reference numbers. We will then process the payment and provide you with a proof of execution. |
| Localisation | Opening a CMA-domiciled account allows clients to use the local payment systems within Namibia, Lesotho or Eswatini. Localising in each CMA country is possible for both payments and collections: • One option is to work with a local counterpart in the specific CMA country, authorised to process collections on your behalf. • Another option is to request your debtors to make payments directly to you (push payment) instead of you collecting funds through a debit order instrument (pull transaction). Localisation is recommended if you have a high volume of payments or if you process both payments and collections. Please contact your relationship manager for assistance to localise. |
PLEASE REMEMBER:
Double-check all the information before sending the payment to avoid any errors that could lead to delays. If you do have any queries or requests, contact your relationship manager for assistance.
For further information
If you have any questions or concerns regarding these changes, contact your Standard Bank relationship manager or visit the SARB CMA Regulatory Changes Media Release for further updates.
Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.